A review of frontier approaches to efficiency and productivity measurement in urban water utilities

Abstract

Despite the rapid global revitalisation of urban water policy, and the universal need to measure and improve organizational efficiency and productivity in all suppliers as a means of ensuring the sustainability of this key resource, only recently have the most advanced econometric and mathematical programming frontier techniques been applied to urban water utilities. This paper provides a synoptic survey of the comparatively few empirical analyses of frontier efficiency and productivity measurement in urban water utilities in Australia, the UK, Spain, the US, Mexico, Brazil, Canada, Germany, Italy, Malaysia, and Slovenia, among others. The survey examines both estimation and measurement techniques and the non-discretionary structural and regulatory determinants of efficiency and productivity. There is particular focus on how the results of past studies inform regulatory policy and managerial behaviour and key directions for future research.